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| Image: Flickr User - The White House |
By Todd Williamson
Jokowi’s intention to join the TPP, while easier said than done, is still a welcome move.
Given that Indonesia has long refrained from committing to the Trans-Pacific Partnership (TPP), President Joko “Jokowi” Widodo’s announcement in late October that “Indonesia intends to join the TPP” came as a surprise to most of the world. Jokowi’s statement directly followed his trip to Washington, D.C., where he met with Barack Obama to discuss the possibility of Indonesia joining the massive Pacific Rim trade agreement.
With regional neighbors Australia, Malaysia, Singapore, Vietnam and Brunei already signed on to TPP, Indonesia has come to recognize that it risks falling behind as a regional power if it does not join the 12-nation trade bloc. But a declaration of intent is only the first, and easiest, step: securing the backing of the Indonesian legislature, which is necessary in order to join TPP, will be much tougher.
Indonesia belongs to all of the right geoeconomic clubs. It is a G20 member with a trillion-dollar economy, and boasts memberships in both the U.S.-led World Bank and China’s Asian Infrastructure Investment Bank. It is also currently the chair of the Indian Ocean Rim Association for Regional Cooperation. But throughout 2015, Indonesia found itself in the headlines for a variety of unsavory reasons: strained relations with Australia, Brazil and the Netherlands due to the execution of Indonesian citizens by firing squads; haze pollution in its peatlands that led to over 500,000 cases of severe respiratory issues; and increasing investor frustration with the country’s outdated protectionist policies which bode poorly for its growth. Indonesia was starting to look less like the largest economy in Southeast Asia and third-largest democracy in the world, and more like a country unable to pull its own weight.
With his endorsement of TPP, Jokowi has signaled that he is getting serious about attracting greater foreign investment to Indonesia’s shores and moving the country away from its nationalist economic policies. Through TPP, Indonesia’s small and medium sized enterprises (SMEs) will have greater access to markets from as geographically close as Australia to as far as Canada, allowing them to expand capacity and create more jobs at home. In addition, TPP will put Indonesia in a single market with countries that make up a fourth of the global trade market. Tariffs on various items and industries such as agricultural products, financial services, tourism, insurance and capital transfers will be completely dissolved between TPP members.
Read the full story at The Diplomat